Chapter 20 Quiz Questions
After selecting a pricing strategy, what is the next step in the establishment of prices?
Answer: Determining a specific price
Which of the following is true about the target market's evaluation of price?
Answer: The importance of price depends on the type of product.
Marketers at organizations engaged in nonprice competition
Answer: need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
A marketer is most likely to set prices according to a cash-flow objective when a
Answer: quick return on investment is desired
What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?
Professional pricing
Which of the following characteristics is unique to pricing more so than other variables of the marketing mix? Answers: a. Flexibility b. Consistency c. Challenging d. Truthfulness e. Clarity
a
Which of the following would be used in setting the price of a new product if considerable competition is expected? Answers: a. Penetration pricing b. Price skimming c. Psychological pricing d. Prestige pricing e. Odd-even pricing
a
Pricing the basic product in a product line low while pricing related items at a higher level is called Answers: a. premium pricing. b. captive pricing. c. price lining. d. price skimming. e. bait pricing.
b
The federal government often uses ____ pricing when it grants defense contracts.
cost-plus
All of the following are psychological techniques except
customary pricing
Maintaining or increasing market share Answers: a. is directly tied to leading an industry in product quality. b. depends on the overall growth of the total industry. c. is a profit-related objective based on price. d. can be achieved even if industry sales are flat or decreasing. e. is an infrequently used pricing objective in most industries.
d
Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales. Answers: a. status quo b. survival c. return on investment d. market share e. product quality
d
If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500 because it knows that at that price it will reach that goal, the firm would be using a ____ pricing method.
demand-based
A product is a price leader when
it is sold at less than cost in the hope that sales of other products will increase.
Reference pricing is
pricing a product at a moderate level and positioning it next to a more expensive model or brand
Maria recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use Answers: a. price lining. b. negotiated pricing. c. professional pricing. d. secondary-market pricing. e. reference pricing.
b
Pricing the basic product in a product line low while pricing related items at a higher level is called Answers: a. premium pricing. b. price lining. c. price skimming. d. bait pricing. e. captive pricing.
e